In connection wth our concern for the welfare of agricultural families, we believe that H. R. 6000 should provide for an increase in grants-in-aid to State assistance, health, and welfare programs. It is generally true that States and counties which lack funds or facilities cut services to farm families first. No State in the Union provides a well-rounded health and welfare program for all its rural families. Only substantial grants-in-aid will make possible adequate care for these Americans. 3. Congress needs to recognize the long-range and difficult problem of Puerto Rico. Welfare aids which can be extended through our social-security system will aid materially in the solution of one aspect of the problem of Puerto Rico. We strongly support the provisions of H. R. 6000 which would extend old-age and survivors insurance to Puerto Rico and the Virgin Islands. The desire on the part of the 2,000,000 Americans, whose home is Puerto Rico, to be included in the social security insurance system is a healthy one. It reflects an optimism about the success of a current effort to raise productivity and living standards through industrialization. At this point in the economic development of the island, very few workers reach retirement age; few Puerto Ricans have sufficient income or enough steady employment to qualify for the insurance benefits if they do reach retirement age. It is important, however, that workers who can contribute to an insurance system be permitted to share in the benefits on an equal basis with their fellow Americans on the mainland. ("Equal basis," as used above, means that Puerto Rican workers will receive benefits equal to those of U. S. workers of the same income.) This is consistent with the policy of placing a contributory insurance system above reliance on a system of direct assistance. If we do not include these workers in an insurance plan, they will be forced to rely on direct assistance. We are wholly in accord with present provisions extending grants-in-aid to the insular government for public assistance. The whole social security system is predicated on the philosophy that local resources cannot be expected to meet all of the welfare needs, and that Federal assistance should be extended on the basis of need for the well-being of the Nation as a whole. We support the proposals to include Puerto Rico in the public-assistance and child-welfare programs of social security. The average per capita income in Puerto Rico is less than half that of Mississippi, the lowest income State. The desperate need for welfare aids becomes increasingly apparent when one considers that these low incomes are not balanced off by lower cost of living. The cost of living in Puerto Rico at comparable standards to those in the United States is as high as that of the mainland. The Puerto Ricans have demonstrated initiative and imagination with a program to meet the problem of maintaining economic gains in the face of rapidly growing population where the population is already dense and natural resources sharply limited. An unenlightened trade policy toward Puerto Rico has retarded industrialization of the island in the past. Now that the process is taking place, the benefits of increased public assistance and extension of the social security insurance can go a long way toward improving the economic health of a depressed domestic area. A STATEMENT BY THE LUTHERAN CHURCH, MISSOURI SYNOD, To the United States Senate Finance Committee: SIRS: Your committee is presently considering H. R. 6000, popularly known as "The new Federal social security bill.” In lieu of appearing before your committee at its hearings, for which no appointment could be secured, the undersigned, speaking for the Lutheran Church, Missouri Synod, wish, in this brief written statement, to draw your attention to an apparent need of amending or clarifying section 210, page 40, subparagraph (9), which excepts "Service performed by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order." We submit that the Lutheran Church, Missouri Synod, has in addition to its pastors a class of ministers, 1,374 of them in 1948, who should classify under the term "duly ordained," but might be held to be outside of the scope of that term in the administration of the act, on the technicality that they are not formally ordained and are not pastors. 60805-50-pt. 3- -78 Definition of the ministers in question The 1,374 ministers in question belong to the clergy of our church and are officially defined by our church as "ministers of religion," "ministers of the Gospel," or "servants of the Word." They are trained for their vocation in institutions which our church maintains specifically and solely for that purpose. They are officially approved by the church, formally called by local congregations, installed by authority of the officials of the church, and consecrated for a life-long. full-time service to the church, precisely the same as the pastors. They receive a theological training which is substantially the same as that of pastors, originally the same, but today with more emphasis on education. They may, and on occasion do, transfer from their particular service to that of a pastor, or are called upon by a church in their present capacity to perform, or help perform, sacerdotal and other pastoral functions. They are formally called, installed, and pledged for life to the service of the church as "ministers of religion," have an active part in the performance of the ministry of the church, and devote themselves primarily to teaching instead of preaching. Their main obligation is to conduct and teach Lutheran elementary, secondary, and higher schools, although in the local church they commonly instruct also adults and young people, and in general assist the pastor in the ministry of the congregation. In this respect they compare in a way to the teaching orders of the Roman Catholic Church, except that they are not organized as an order. The ministers in question are men. Ordinarily they are married and have families. They are salaried by the local church, have no other vocation, and are covered by the pension system of our synod, under exactly the same terms as our pastors. Like the pastors, they have also been exempt from military service in World Wars I and II as "ministers of religion." Classification under H. R. 6000. We have no doubt that the authors of the bill intend to except the service of the ministers in question, especially since they name members of a religious order besides duly ordained, commissioned, or licensed ministers. But we also sense the need of amending or clarifying this provision, for we fear that, in the interpre tation and administration of this act, the term "duly ordained" could be taken to mean only pastors, and that the ministers here under consideration would also not classify under "commissioned, or licensed minister." Clarifying amendment We respectfully urge, therefore, that section 210, page 40, subparagraph (9) of H. R. 6000, be amended by your honorable committee as follows: "(9) Service performed by a duly ordained, commissioned, or licensed minister of a church, including a formally called and installed minister of religious education, in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order." JOHN W. BEHNKEN, D. D., President, The Lutheran Church, Missouri Synod. PAUL M. BRETSCHER, Ph. D., Chairman, Board for Parish Education, STATEMENT OF EUGENE J. BUTLER, ASSISTANT DIRECTOR, LEGAL DEPARTMENT, NATIONAL CATHOLIC WELFARE CONFERENCE I desire to address myself to the committee on the subject of title II of the Social Security Act, providing Federal old-age and survivors' insurance benefits, and section 1426 (b) (8) of the Internal Revenue Code which exempts certa B organizations from the payment of taxes imposed under the Federal Insurance Contribution Act (title VIII of the Social Security Act). The provisions of the Internal Revenue Code are the following: "SEC. 1410. In addition to other taxes, every employer shall pay an excise tax with respect to having individuals in his employ." (The rate is fixed by the statute and is intended to increase progressively unta it is 3 percent of the wages paid by the employer.) except:" (there Section 1426 (a) defines wages and section 1426 (b) defines employment as follows: "The term 'employment' means any service are ten classes of service excepted). Among these excepted services is: "(8) Services performed in the employ of a corporation, community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation." This exception by definition has the effect of exempting a large number of organizations and their employees from the payment of tax under section 1410 and their employers from the payment of tax under section 1400. This exception results further in the exclusion of employees in these organizations and institutions from the benefits of old-age and survivors' insurance. From the very inception of the social security system, the National Catholic Welfare Conference has been concerned over the status of employees of religious organizations in relation to old-age and survivors insurance, and on many occasions has expressed its sincere desire to have lay employees of these organizations covered under this program. When the legislation was first under consideration, and again in 1939, when the late President Franklin D. Roosevelt proposed amendments to the program in operation, a spokesman for the NCWC appealed for coverage for the lay employees of such organizations, and, at the same time, asked for serious considerations of methods to protect the traditional exemption from taxes of religious organizations. At that time, the NCWC planned to present its views to the congressional committees. However, it will be recalled, such opposition to any possibility of taxing religious organizations had arisen, that the House Ways and Means Committee decided to abandon its attempt to work out a solution to the problem. Later, a communication was directed to the chairman of the Senate Committee on Finance which stated, in part: "The administrative board (NCWC) pleads for a formula of participation of workers in the old-age benefits of the act without prejudice to the tax-exempt status of the nonprofit religious, charitable, and educational institutions." In March of 1946, a spokesman for the NCWC appeared before the House Committee on Ways and Means and in presenting his testimony stated, in part: "The exclusion of these employees (of religious organizations), unfair though it is, is traceable to the failure of this committee to develop a formula under which provision would be made to extend to these employees the benefits of old-age and survivors insurance but which, in extending benefits, would give sincere and full recognition to the fact that traditionally these church related activities have been generally exempt from taxation." Very briefly, this has been the consistent attitude of the National Catholic Welfare Conference on this important subject over the years. It has always been the contention of the NCWC that the employees of religious, charitable, and educational organizations should be covered, The NCWC has objected strongly to the fact that its employees and the employees of similar organizations were denied the benefits which old-age and supervivors insurance makes available to all other employees. However, it contended sincerely, and still insists, that the traditional tax-exempt status of religious organizations is not merely a "catch phrase," but a symbol of a distinctive American heritage. Far from being a special privilege, it is a recognition by the Federal Government of the important contributions to the general welfare made by religious, charitable and educational organizations and institutions. Therefore, the National Catholic Welfare Conference has regarded this problem as one with two facets. On the one hand, there was the desire on the part of the administrative board that all of its employees, and the employees of all religious organizations, should enjoy the benefits which this program makes available. On the other hand, there was this tradition, this American heritage, that religious organizations should be exempt from direct tax levies. This principle, deeply rooted in our national history, the NCWC believes is worth preserving and defending. The problem the administrative board of NCWC recognizes as one which has engaged the efforts of you distinguished gentlemen and your honorable predecessors in office is working out a formula which will make adequate porvision for both aspects which I have outlined. During the Eightieth Congress, the administrative board was heartened by the proposal by the House Committee on Ways and Means in this connection. As you will recall, it was proposed at that time that the employees of religious, charitable and educational organizations should be covered into the program on a "voluntary" basis. In other words, religious, charitable, and educational institutions, as employers, were permitted, in the proposed legislation, to determine whether or not to make the contributions to the old-age and survivors insurance fund and thus make it possible for the employees to be covered into the system. Although, admittedly, there was no absolute guaranty that all the employees of exempt organizations would enjoy these benefits, there was a definite recognition by the committee of the fact that the tax-exempt status of this type of institution should be protected. That proposal was embodied in amendments to the Social Security Act which the House of Representatives approved in the Eightieth Congress. It is our sincere opinion that the proposals contained in the legislation presently under consideration are adequate to meet the problem which the NCWC considers most important. It is a matter of simple justice, that the employees of religious, charitable, and educational institutions be protected by the provisions of old-age and survivors insurance. From the standpoint of economics, it is imperative that they enjoy these benefits. It is not good for the continued efficient operation of any such institution that its employees are strongly attracted to other employment offering the social security benefits which are denied them in religious, charitable, and educational institutions. H. R. 6000, in our opinion, in providing these benefits for this class of employee, is a long step forward in the advancement of this great social program. At the same time, this legislation, H. R. 6000, recognizes the importance of the American heritage of which I have spoken, and protects it. It makes completely voluntary the decision whether or not a religions, charitable, or educational institution shall contribute to the fund for old-age and survivors insurance coverage. This measure makes provision for regulations covering the manner in which such an employer may make its voluntary contributions. The National Catholic Welfare Conference is confident that care will be taken to make these regulations just and equitable both to the employers and the employees. The NCWC has pleaded for many years for a satisfactory solution to this perplexing problem. The present measure represents to my mind a major accomplishment. Your committee is to be congratulated. STATEMENT OF THE NATIONAL FUNERAL DIRECTORS ASSOCIATION OF THE UNITED STATES, INC., CONCERNING LUMP SUM DEATH PAYMENTS AS A PART OF THE SOCIAL SECURITY PROGRAM FOREWORD The National Funeral Directors Association of the United States, Inc., was organized in 1882. As of March 1, 1950, this organization had 11,461 members in good standing. These members are primarily owners and operators of funeral establishment located in every State of the Union and in the District of Columbia. It is estimated that each year the members of NFDA take care of the funeral services of more than 1,000,000 Americans. As counselor to the bereaved families the funeral director must advise them on many of the problems which arise at the time of death. One of these is the matter of social-security benefits. In keeping with an association policy, we feel we are not in a position to comment on all the phases of the social-security program. However, each day funeral directors throughout the Nation have an opportunity to observe the reaction to and benefits of lump-sum death payments under the law, and it is in regard to this subject and this subject alone that we wish to submit the following statement. STATEMENT ON LUMP-SUM DEATH PAYMENTS It has come to our attention that testimony before the Finance Committee has revealed that certain groups are asking that all lump-sum death payments under the provisions of the social-security law be abolished. The National Funeral Directors Association of the United States believes that as a part of the social-security program there should be a lump-sum death payment which is primarily a death benefit and not a burial or funeral allowance. This is the case under the present social-security law and under H. R. 6000 Under these two measures it is impossible for the individual who is going to receive a lump-sum benefit or for the funeral director to know what the amount of such benefit is going to be until it is received. We believe that lump-sum payments should continue as provided for under the present law. Under such a program, survivors selecting a funeral service cannot be greatly influenced by the amount of the social-security lump-sum payment. It has been the observation of our members that the survivors select the funeral service they would ordinarily choose, based upon their ability to pay, taking into consideration the costs thereof along with the expenses of the last illness. It is readily apparent that the amount of the lump-sum payment is no sufficient to meet all contingencies that arise with death; therefore industrial or other life-insurance benefits are essential. It has been a further observation that the payment of a lump-sum benefit is of material assistance to survivors in the lower income groups. In addition to the foregoing, there are individuals covered by the present act who, having no dependents, will probably die without survivors and will receive no benefits therefrom except in the form of a lump-sum death payment reim bursing the person who paid the funeral expenses. Many of these individuals are aware of the fact that under the present law this payment will be made and are relying on it to help take care of the expenses of their last illness and death. If there are no social-security lump-sum payments, these individuals will not only fail to receive any benefits from social security but at the time of their death will probably be without sufficient funds to help defray the necessary expenses. If the lump-sum payment is denied in such cases, the Government will find itself in the unfortunate position of having levied confiscatory taxes. It is our considered opinion that if the formula for lump-sum benefits as set up in H. R. 6000 is used that it will result in smaller payments. We do not feel that the House of Representatives so intended. We therefore urge that lump-sum payments be maintained and in an amount that will not be less than under the present law. Unless this is done, those who will need the payments most will suffer thereby. OFFICERS OF THE NATIONAL FUNERAL DIRECTORS ASSOCIATION OF THE Edward A. Martin, president, 550 North Avenue. Grand Junction, Colo. H. Fremont Alderson, second vice president, 75 Federal Street, New London, Geo. A. Brawer, Jr., secretary, 3603 Ross Avenue, Dallas 4, Tex. Harry J. Gilligan, treasurer, 2926 Woodburn Avenue, Cincinnati 6, Ohio. James R. Clark, general counsel, 628 Provident Bank Building, Cincinnati 2, Ohio. Howard C. Raether, executive secretary, 135 West Wells Street, Milwaukee 3, Wis. BOARD OF GOVERNORS District 1: Thomas B. Gleason, 734 State Street, Springfield, Mass. District 4: W. Bruce McDonaldson, Jr., Love Avenue at Sixth Street, Tifton, Ga. District 7: A. B. Eckersell, 101 West Main Street, Rigby, Idaho. STATEMENT FROM THE DAIRY INDUSTRY COMMITTEE, WASHINGTON, D. C. The Dairy Industry Committee is composed of six trade or business associations, as follows: American Butter Institute, American Dry Milk Institute, Evaporated Milk Association, International Association of Ice Cream Manufacturers, Milk Industry Foundation, National Cheese Institute. These member associations in turn are composed of approximately 7,500 employers who employ approximately 500,000 employees throughout the United States in the dairy industry. The annual pay roll is in excess of 1.25 billion dollars. The old-age and survivors insurance tax, under the present law, to be |